[Ip-health] BMS Vs Mylan (Atazanavir)

Baker, Brook b.baker at neu.edu
Mon Dec 16 04:11:37 PST 2013

People are legitimately wondering whether BMS’s prior licensees would routinely be able to sell in these and other no-patent countries given the U.S. Federal District Court judgment involving a breach of contract claim filed by BMS against one of its licensees, Mylan, which had sold ATV to PAHO for use in Venezuela.  There the court held that Mylan could make direct sales to PAHO without breaching an anti-diversion contractual provision, but that decision is now under appeal.  It also appears that BMS has a clear right to terminate the Mylan contract under article 8.1b of its Indemnity from Suit Agreement.  Thus, it seems that the MPP license gives more freedom to act in no-patent countries than was true under the previous BMS voluntary licenses because such non-territorial sales could not result in termination of the generic license.

Professor Brook K. Baker
Health GAP (Global Access Project) &
Northeastern U. School of Law, Program on Human Rights and the Global Economy
Honorary Research Fellow, Faculty of Law, Univ. of KwaZulu Natal, SA
400 Huntington Ave.
Boston, MA 02115 USA
(w) 617-373-3217
(c) 617-259-0760
(f) 617-373-5056
b.baker at neu.edu
From: Ip-health [ip-health-bounces at lists.keionline.org] on behalf of Pauline Londeix [pauline.londeix at gmail.com]
Sent: Saturday, December 14, 2013 12:11 PM
To: ip-health at lists.keionline.org
Subject: [Ip-health] BMS Vs Mylan (Atazanavir)

Dear all,

Please find below an article on a Court decision taken in the U.S. regarding the terms of the agreement that Bristol Myers Squibb and Mylan had in their voluntary licence on Reyataz (Atazanavir).

Was this August Court decision already allowing Mylan, and possibly other licensees, to sell to the 30 countries where there is no patent on ATV ??



 New York (August 12, 2013, 5:17 PM ET) -- Mylan Inc
<http://www.law360.com/companies/mylan-inc> . on Monday dodged a $15 million
breach of contract suit from Bristol-Myers Squibb Co
<http://www.law360.com/companies/bristol-myers-squibb-company> . after a New
York federal judge found that an agreement between the companies didn't bar
Mylan's sales of an HIV drug in Venezuela, although a patent infringement
complaint is still possible.

The opinion from U.S. District Judge Paul A. Engelmayer turned on a highly
technical reading of a contract that immunized Mylan from patent
infringement liability when selling a generic version of Reyataz, or
atazanavir, in India and sub-Saharan Africa.

While the agreement left Mylan exposed to intellectual property suits for
selling the product elsewhere, that's not the same thing as saying that
Mylan would breach the contract by engaging in such sales, Judge Engelmayer

"Although the agreement provides immunity from suit for sales in [India and
Africa], it nowhere purports to prohibit [Mylan] from making sales outside
[those countries]," the judge wrote.

In arguing otherwise, Bristol-Myers pointed to a provision of the contract
in which Mylan promised not to sell the drug to any third parties that might
export it to places outside India and Africa.

Judge Engelmayer, however, said that no such activity took place. Instead,
Mylan sold atazanavir to the Pan American Health Organization, which then
distributed it within Venezuela.

"In other words, [the contract] provides that [Mylan] cannot claim immunity
under the agreement were it, for example, to use a third-party intermediary
in India to enable it to sell generic atazanavir in Pakistan," the judge
said. "[It] does not, however, prevent [Mylan] itself from selling generic
atazanavir in Pakistan, or, relevant here, Venezuela."

According to the suit, Bristol-Myers assisted Mylan in producing atazanavir
and allowed its sales in India and Africa as a charitable endeavor meant to
help poor nations beset by HIV and AIDS. When it came to Venezuela, however,
Bristol-Myers had for years negotiated sales to the government and had
rebuffed Mylan's request to include the country in its distribution network,
only to see Mylan disregard its refusal and sell the PAHO a year's supply
valued at $15 million.

While the contract doesn't create a legal claim for that move, it's possible
that Bristol-Myers can rejigger its suit in a way that has legs, Judge
Engelmayer wrote.

"To be sure, [Mylan's] sales of generic atazanavir may be actionable on
other grounds. [Bristol-Myers] may have a cause of action against [Mylan]
for its sales in Venezuela under relevant patent [laws]," the judge said.
"But [Bristol-Myers'] claim here is for breach of contract, based on the
agreement. Under the plain language of the agreement, no such claim lies."
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